Grover Norquist Taxpayer Protection Pledge to be broken by several Republicans in fiscal-cliff compromise

WASHINGTON – U.S. Republicans appear to have opened the door to a compromise in negotiations over the much-feared fiscal cliff that economists say could plunge the world into a recession.

Four prominent Republican congressmen announced this weekend and Monday that they are prepared to shed the so-called Grover Norquist Taxpayer Protection Pledge that over the last 20 years has bound many lawmakers to vote against tax increases.

The Norquist disavowal appears to have cracked the concrete wall that has divided U.S. congressmen on budget issues and tax reform, often grinding congress to a halt.

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Norquist is a unique American phenomenon. He’s a Washington lobbyist and part-time amateur comedian who basically represents rich people who don’t want to pay taxes and Tea Party supporters who want the government to slash spending to the bone.

Norquist, who once said that he wanted to make government small enough so he could strangle it in the bathtub, first started pressuring lawmakers to sign his no-tax pledge in 1992.

Backed by rich Americans such as the Koch brothers, his Americans for Tax Reform organization cowered politicians who refused to sign by launching publicity campaigns to discredit them. Many lost their seats as a result, greatly strengthening Norquist’s position on Capitol Hill.

With prominent Republicans such as Peter King of New York and Sen. Saxby Chambliss of Georgia now saying the care more about their country than a 20-year-old pledge, Norquist is beginning to look deflated.

But don’t count him out, said Tim Hagle, a political scientist and Republican watcher at the University of Iowa.

The fiscal cliff, which will trigger on Jan. 1 huge tax hikes and spending cuts, has painted anti-tax Republicans into a corner, he said. And a guy like Norquist isn’t going to back down.

“The problem with the Republicans is that Norquist does speak for a lot of folks that basically believe that the problem isn’t one of revenue, it’s spending,” Hagle said. “Many Republican candidates have repeated that willingly over the last months, and he is going to be on their case if they raise taxes or even find another way to increase revenues.”

He said Republicans ultimately would have to agree to tax increases for the rich in exchange for spending cuts.

Whatever compromise Republicans make is not going to make Norquist and his supporters happy, he said. But if they allow the country to tumble over the fiscal cliff they will be blamed for the resultant tax increases.

“Grover Norquist might be able to fire up enough people in his constituency and get them to make calls to Republican office holders suggesting that they need to be careful about how you are going to vote on this,” he said.

One rich guy who doesn’t support Norquist is billionaire investor Warren Buffett, chairman and chief executive of Berkshire Hathaway. In an opinion piece published in the New York Times Monday, he called on congress to impose immediately a minimum income tax of 30 per cent on incomes between $1 million and $10 million and 35 per cent on all incomes above that.

He noted that the 400 richest Americans earned in 2009 an average income of $202 million. A quarter of them paid less than 15 per cent in taxes; more than half paid less than 20 per cent in taxes and some paid no taxes.

“In recent years, my gang has been leaving the middle class in the dust,” he said.

He also called for broad reforms of the tax code that would bar the rich from using devises such as a Cayman Island mailing address to avoid taxes.

“It’s sickening that a Cayman Islands mail drop can be central to tax manoeuvring by wealthy individuals and corporations,” he said.

Buffett ridiculed the Norquist claim that raising taxes on the wealthy will decrease investment. He said no investor would deny himself an investment opportunity because he might be paying higher taxes on his profits.

“So let’s forget about the rich and ultra-rich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased,” he said. “The ultra-rich, including me, will forever pursue investment opportunities.”